CHAPTER: PARTNERSHIP
QUESTION 1: TEST
Salleh and Ali have been in a partnership business since 2018. Their business known
as Fritters Power which sells various types of fritters such as original banana fritters,
banana fritters with cheese, durian fritters, jackfruit fritters, tempe fritters and keropok
lekor at Taman Sejati, Segamat. In addition to fritters, they also sell a variety of fruits
in cups, burgers and drinks such as coconut shake with ice cream and mango shake
with honey.
Each partner contributed RM6,000 as capital and agreed to share the profit or loss
equally. Their partnership agreement stated that each partner is entitled to receive an
interest on capital at the rate of 10% per annum and a monthly salary of RM2,000.
On 1 April 2023, Azmi was admitted to the partnership with a capital contribution of
RM12,000. Since the admission of Azmi, the partners agreed that the profit sharing
ratio will be based on capital contribution. Other terms of the agreement remain the
same.
On 1 December 2023, Salleh retired from the partnership and withdrew all his capital
contribution. The terms of the partnership agreement remain as before the retirement
of Salleh.
Additional information:
1. The partnership’s provisional income for the year was RM156,050.
2. The current year capital allowances and balancing charge were RM9,000 and
RM3,000 respectively.
3. Salleh received rental income of RM10,000 during the year.
4. Ali received interest income of RM6,000 from a fixed deposit he placed in CIMB
Bank during the year.
5. Azmi made a cash donation of RM3,000 to an approved institution on 20
December 2023.
Required:
a. Determine the divisible income of the partnership for the year of assessment 2023.
b. Calculate the total income for Salleh, Ali and Azmi for the year of assessment 2023.
QUESTION 2: TEST
The partnership firm, Alice, Betty and Christine closes its annual accounts on 31
December. Christine ceased to be a partner on 30 June 2023; Dolly joined the
partnership on 1 July 2023. The partnership agreement provides for the profits for the
year 2023 to be shared as follows:
Salary Interest on capital
(RM) (RM)
Alice 30,000 5,700
Betty 36,000 Nil
Christine Nil 2,400
Dolly 18,000 2,000
Profit-sharing ratio Alice Betty Christine Dolly
1/1/2023 – 30/6/2023 1/2 1/4 1/4 -
1/7/2023 – 31/12/2023 1/3 1/3 - 1/3
The partnership’s profit for the year ending 31 December 2023 of RM256,900 after
taking into account the following:
RM RM
Rental income received from the lessee of the 18,000
partnership’s
previous premises
Depreciation 53,100
Private expenses:
Alice: private car use 3,000
Christine: medical expenses 4,000 7,000
Partners’ salaries 84,000
Interest on capital 10,100
Approved donation on 2/6/2023 10,000
Approved donation paid on 3/7/2023 18,000
Unapproved donation paid on 10/10/2023 4,000
Capital allowance of RM21,000 for the year of assessment 2023.
Required:
(i) Compute the provisional adjusted income and divisible income of the
partnership for the year of assessment 2023.
(ii) Based on the information given above, compute the total income of each of the
four partners for the year of assessment 2023.
